CHAMP makes first Southeast Asia forays

When the mezzanine team took public IT solutions provider Datacraft in Singapore in 1997, it marked the territory's first US dollar-denominated offering and the first Australian-backed IPO in Asia.

Over the ensuing years, CHAMP and its peers have focused on domestic deals, recognizing that versions of the Australian buyout model are a rarity in Asia. As Peter Wiggs, managing director of Archer Capital, put it earlier this year, "In terms of pushing companies up into Asia, I suspect an Asian strategic investor would be better at that than me, so I should focus on identifying opportunities in Australia... and position them for someone else to push up into Asia."

Towards the end of the 2000s, however, CHAMP began to refine its approach. A Singapore office was established in 2008, not only to support portfolio companies expanding into the region but also to look out for investment opportunities. It remains the only Australian GP with a presence in Asia.

"We are seeing transactions emanating from our Singapore office and they are only available to us because we have that cross-border capacity to get the transaction sensibly done," a senior CHAMP executive told AVCJ last month.

Two Asia-focused deals have come to fruition in the last fortnight. Firstly, CHAMP, Castle Harlan and Lime Rock Partners invested around $1.05 billion in Dubai-based shallow water drilling services company Shelf Drilling. The capital will be used to purchase equipment for use throughout Southeast Asia, India, West Africa, the Middle East and the Mediterranean.

Secondly, CHAMP acted independently in the acquisition of a significant minority stake in shipping services provider Miclyn Express Offshore (MEO) from Macquarie Capital Group for around A$199 million ($206 million). The private equity firm has agreed to buy 92.4 million ordinary shares - a 33.2% stake in the business - for A$2.15 per share in cash, plus a further A$0.10 per share conditional on certain earnings milestones being achieved.

MEO trades on the Australian Securities Exchange but is headquartered in Singapore. It has a fleet of more than 120 vessels that support the offshore oil and gas industry in Southeast Asia, Australia and the Middle East. The company also owns a shipyard in Indonesia.

Macquarie acquired MEO in 2007 through a $286 million leveraged buyout and took it public three years later. Headland Capital Partners bought a 26.45% stake in MEO for $141 million last September.

"The investment in Miclyn is an ideal fit with CHAMP's regional investment strategy and builds on our longstanding track record of investing in service providers to the resources and energy sectors," says Nathaniel Childres, managing director of the PE firm's Singapore office.

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• Topics
• Southeast Asia
• Investments
• CHAMP Private Equity
• Southeast Asia